singapore stocks close subdued on china and rate hike worries 1177942015

Singapore stocks were on the back foot on Monday, following regional bearishness, particularly in the Chinese stock markets, as well as fresh fears of a US interest-rate hike triggered by the weekend remarks of US Federal Reserve Vice Chairman Stanley Fischer at the weekend which left open the possibility of a September interest rate rise.

Banks were hit hard as DBS Group Holdings Ltd (SGX:D05) fell 1.39 per cent to SG$17.76, United Overseas Bank Ltd (SGX:U11) fell 1.87 per cent to SG$19.38 and Oversea-Chinese Banking Corp. Limited (SGX:O39) slid 1.87 per cent to SG$8.93.

However, Noble Group Limited (SGX:N21) surged 4.81 per cent to SG$0.55, boosted by recent M&A activity in the commodity sector, particularly Olam International Ltd (SGX:O32), in which Japanese corporation Mitsubishi acquired a stake.

Indices and sectors

The Straits Times Index (STI) ended 34.5 points or 1.17 per cent lower at 2,921.44, taking the year-to-date performance to -13.19 per cent.

The FTSE ST Mid Cap Index declined 0.42 per cent, while the FTSE ST Small Cap Index declined 0.28 per cent.

The Singapore Exchange traded a volume of 1,313.3 million shares valued at SG$1,356.1 million. Losers outnumbered gainers by 270/177.

Amongst the FTSE ST sectors, the big losers included oil and gas (-2.28 per cent), telecommunications (-1.33 per cent), technology (-1.24 per cent), financials (-1.10 per cent), utilities (-0.96 per cent) and industrials (-0.69 per cent). Maritime (+1.40 per cent) and basic materials (+0.42 per cent) were the only two gaining sectors.

Stocks

According to the Business Times, Singapore listed companies lost SG$83 billion of value amidst the global market mayhem that prevailed in the month of August, and had a total market capitalisation of SG$854 billion as at August 31.

Executive chairman Gary Loh of Sunmoon Food Co Ltd (SGX:AAJ) said on Monday that the company’s 2013 debt restructuring had helped clean up its balance sheet and saved it SG$2 million dollars annually in interest, according to the Business Times. Mr Goh was issuing the clarification in the context of an article in the Straits Times of August 25 which he alleged appeared to “skew the financial performance of the group.”

China Fishery Group Limited (SGX:B0Z) said Monday morning that the Carlyle group had ended its presence on the board of the company four months after it declined to participate in its rights issue, the Business Times said. China Fishery and its parent, Pacific Andes International Holdings said August 21 that they were being investigated by regulators in Singapore and Hong Kong.

Economic news

The highly anticipated Singapore Savings Bonds (SSB) will launch today and are expected to be attractive to the investing population because they offer higher returns on fixed deposits and other features such as a government guarantee and flexible redemption. However, a report in TODAY says the public have a mixed approach to the SSBs, and reactions range from an eagerness to add these bonds to portfolios to a total ignorance of the new investment avenue.

According to analysts the imminent general elections in Singapore are unlikely to have a major impact on the country’s stock market, and that investors are more likely to give weight to the problems in the Chinese economy and the likelihood of a US interest-rate hike, said the Business Times.

Singapore’s total bank lending rose to SG$610.4 billion in July, up 0.59 per cent from SG$606.8 billion in June, data released by the Monetary Authority of Singapore showed. On a year-on-year basis, bank lending was up 2.2 per cent from SG$597.4 billion in the prior year period, the Straits Times said.

US oil futures surged higher for the third straight session as short sellers scrambled for the exits on a downward revision of United States crude production data and a statement from OPEC expressing its readiness to talk with other producers. United States crude gained US$3.98, or 8.8 percent, to settle at US$49.20 a barrel, taking three-day gains to 27.5 percent, while Brent October futures rose US$4.10, or 8.2 percent, to settle at US$54.15 a barrel, according to the New York Times.

On Wall Street Monday, US stocks ended lower as investors worried about the US fed’s interest rate hike and the Chinese economic slowdown. The Dow Jones Industrial Average finished down 114.98 points (0.69 per cent) at 16,528.03. The broader S&P 500 lost 16.69 points (0.84 per cent) at 1,972.18, and the Nasdaq Composite gave up 51.82 points (1.07 per cent) at 4,776.51.